Keppel Infrastructure Trust (A7RU) H2 2023 earnings summary

Executive summary

• FY2023 record Distributable Income (DI) of S$316.8m, up 42.4% YoY, and record EBITDA of S$447.6m, up 11.3%.

• Total return was 14.3% and distribution yield was 7%, exceeding STI total return of 4.8% and yield of 4.1%.

• AUM rose 11% to S$8.1b as at 2 Jan 2024, reflecting acquisitions and higher valuations of existing assets.

Financial highlights

• FY2023 total DPU was 6.19 cents, up 62% YoY, including a 2.33-cent special distribution; excluding the special distribution, DPU rose 1% to 3.86 cents.

• DI included S$131.2m from Ixom capital optimisation, distributed to unitholders as special distributions in Nov 2023.

• Asset DI grew 9% to S$304.5m; FY2023 EBITDA was S$447.6m, or S$456.3m before specified acquisition costs, FX and fair-value gains, an EMK write-off and a wind-farm impairment reversal.

• Excluding the first German Solar Portfolio acquisition phase, AUM was S$7.4b at 31 Dec 2023, up 1% YoY on higher existing-portfolio valuations.

Outlook and guidance

• Growth priorities include yield-accretive acquisitions, asset recycling and expansion in developed APAC and European markets; one or two investments were anticipated in 2024, subject to selectivity and value accretion.

• Renewables exposure reached 19% of AUM, toward a 25% target by 2030; the German solar acquisition is expected to lift renewables exposure to 1.3 GW from 740 MW.

• Pipeline includes six consented European wind projects totaling 486 MW, eight further projects totaling 660 MW, and potential investment in up to 1 GW of Jinko Power solar and storage projects.

• German Solar Portfolio closing for the remaining 6,500 systems was planned in phases by end-Jun 2024; new Philippine Coastal tanks were on track for completion in 2H 2024.